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Zinc surges as supply deficit erodes stockpiles

Metal News - Published on Wed, 10 Oct 2018

Image Source: Business Recorder
Reuters reported that zinc prices rose on Tuesday towards last week’s three-month high as falling stockpiles underlined a global supply shortage. Benchmark zinc on the London Metal Exchange (LME) closed up 2.4 percent at USD 2,678 a tonne. Zinc has surged by more than 17 percent from August’s 22-month low of USD 2,283 and is close to a USD 2,706.94 peak reached on October 2. Zinc inventories in LME-registered warehouses fell below 200,000 tonnes from more than 250,000 tonnes in August and are nearing 10-year lows. Stockpiles in Shanghai Futures Exchange storehouses are at 29,204 tonnes, the lowest since 2007. The premium of cash zinc over the three-month contract rose to USD 41.50, reversing recent falls and signalling a lack of nearby supply.

But the rally is likely to be short-lived, said Capital Economics analyst Caroline Bain. She said “The market does look a bit tighter currently, but over the next three months we see the supply picture improving.”

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Posted By : Rabi Wangkhem on Wed, 10 Oct 2018
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